Monday, October 6, 2014

Want to Show Your Appreciation to a Government Employee With a Small Gift?

The Government has a set of ethical standards that it expects its employees to adhere to. Government contractors, at least those with a $5 million contract that extends more than four months, are required to implement business ethics and compliance programs.We would take it a step further and suggest that every Government contractor have one, regardless of their sales volume.

We were recently reminded of this as we were reading an article about a Government whistleblower who alerted the authorities to the fact that another employee (a contracting officer) was receiving some pretty nice gifts from a contractor. This alleged gifting occurred overseas where sometimes, cultural norms conflict with the ethical standards expected of Government employees. Nevertheless, Government employees are bound by Standards of Conduct for Employees of the Executive Branch, not by the cultural norms of the country they happen to interacting in some fashion.

We've written extensively in these pages concerning ethical standards for contractors and Government employees. Concerning the giving of gifts, we wrote a comprehensively piece back in 2010. There is a little bit of wiggle room (e.g the $20 maximum) but we've always cautioned clients to err on the side of caution and don't give gifts period. Sometimes appearances, while they can be deceiving, can cause a lot of grief,

The Office of Government Ethics (OGE) published the Standards of Ethical Conduct for Employees of the Executive Branch in 1992 (codified in 5 CFR Part 2635). It sets forth a series of overarching principles of ethical conduct and instructs employees to apply them when considering situations not specifically addressed by regulations. It also, for situations that involve appearances of conflicts, provides that the circumstances be judged from the perspective of a reasonable person with knowledge of the relevant facts.

Subpart B prohibits Government employees from soliciting or accepting gifts from prohibited sources or gifts given because of their official position. The term "prohibited source" includes anyone seeking business with or official action by an employee's agency and anyone substantially affected by the performance of the employee's duties. For example, a company bidding for an agency contract or a person seeking an agency grant would be prohibited source of gifts to employees of that agency.

The term "gift is defined to include nearly anything of market value. However, it does not include items that clearly are not gifts, such as publicly available discounts and commercial loans and it does not include certain inconsequential items, such as coffee, donuts, greeting cards, and certificates.

There are several exceptions to the prohibitions against gifts from outside sources. For example, with some limitations, employees may accept"

  • Unsolicited gifts with a market value of $20 or less per occasion, aggregating no more the $50 in a calendar year from any single source
  • Gifts motivated by a family relationship or personal friendship (but caution is advised when it comes to personal friendships. Some agencies will transfer employees to other assignments if there is a family or personal friendship involved).
  • Free attendance at certain widely-attended gatherings, such as conferences and receptions, when the cost of the attendance is borne by the sponsor of the event (this, of course, does not include tickets to sporting events).
  • Food, refreshments, and entertainment at certain meetings or events while on duty in a foreign country.

Government contractors and Government employees can adhere to these gifting standards but it only takes one person, who does not have all the facts but is concerned about appearances to blow the whistle. At that point, all parties are in for a prolonged investigation, most likely by an IG (Inspector General) organization that will cost plenty of resources. Our advice, just avoid gifting altogether.

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